New figures from the MFAA’s quarterly market survey show brokers still have a stronghold on the home loan market despite increased scrutiny from the royal commission, media reports and other inquiries.
The survey shows brokers originated 55.3% of new residential home loans in the March 2018 quarter, the highest share observed for any March quarter, and up by 1.7% from the December 2017 quarter.
While it was still lower than the record set in the September 2017 quarter at 55.7%, MFAA CEO Mike Felton considers the data a win for the industry, especially in the wake of the Productivity Commission report, which was released during this latest quarter on 7 February and the beginning of the royal commission on 13 March.
“The consumer does not have a confidence deficit in the broker channel. We’ve seen that in the height of this the last three months it has continued to grow,” Felton said in an interview.
“If consumers only see the negative in what is occurring in a channel, that confidence can at times be questioned. We believe that this data will demonstrate to the broker and to the broker’s customers that the channel is very sound.”
At the same time, complaints about brokers have been tracking downwards. In 2016/17, while brokers made up 91% of CIO members, they accounted for only about six per cent of the agency’s complaints. Broker complaints at the FOS were similarly insignificant, representing less than 1% of complaints to the office between 2013 and 2017.
Furthermore, from 2010 to 2017, ASIC investigated 140 broker matters. Of that, only 15 were convicted.
Felton said he understands brokers’ frustration that the public seems to be getting a negative impression of what they do from media reports, while industry data shows something entirely different.
“Consumers are telling you of the value they see in the mortgage broker channel and the outcomes that are being produced. Why would it be growing right in the height of the storm when the industry is [being portrayed] at its most negative, why would it continue to grow?” he says.
The MFAA has already started distributing this data campaign to government, regulators and the mainstream media, and will continue to advocate on brokers’ behalf, Felton said.
The association will also post the research on its website so brokers can use it on their websites or to distribute to clients.
“We believe from the data that we have, like every industry, there will be wrongdoing, but it’s not at the core of our industry and there’s a great deal of incentive for brokers to behave appropriately given that their business models are based on relationships and positive outcomes.”